MSFT · 10-Q · 2026Q3 · Full report

Gaming Demand and Mix Shift

MICROSOFT CORP · 2026-10-28 · Importance 23 · Surprise 22

Xbox revenue decreased 2%, reflecting declines in both content and services and hardware. Xbox content and services revenue fell 2% as third-party content and Game Pass declined, partly offset by growth in first-party content. Xbox hardware revenue declined 14% because fewer consoles were sold.

Key facts

• Microsoft XBOX hardware revenue declined 14% due to lower console sales volume. source
• XBOX content and services revenue decreased 2% in Q1 FY2027 versus Q1 FY2026. source
• Microsoft XBOX revenue decreased $129 million, or 2%, driven by declines in XBOX content and services and XBOX hardware. source
• Microsoft XBOX content and services revenue decreased 2% due to declines in third-party content and XBOX Game Pass, partly offset by first-party content growth. source